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Rediff.com  » Business » The leadership challenge

The leadership challenge

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April 03, 2004 13:38 IST

A lot has already been written about the recent gauntlet thrown by P&G in the detergent product category and the response of the market leader -- Hindustan Lever -- to this challenge.

While P&G's move seemed to have taken HLL by surprise, it is highly reassuring to see the bold response from HLL not only limited to the detergent product category but now also being extended to select personal care products and even other product categories such as ice creams.

While the eventual financial impact of this price war would be known only in the forthcoming months, I believe that the impact of this challenge to HLL's leadership position is already significant and may take this venerable company many years to bounce back.

It is not the first time that HLL has been caught napping, so to say. Nirma's frontal assault many years ago took not only some marketshare away from HLL but also a lot of hard earned sheen, providing role models to many new start-ups such as Ghari (Kanpur Trading Company), Cavincare and Anchor (besides others).

Each of these start-ups may yet not be very significant on a national basis, but are becoming well entrenched in regional pockets and chipping away HLL's leadership in those markets, leading to the situation where HLL has been struggling to achieve a significant top-line growth for several quarters in a row now.

In another sector, Jet Airways has been one of the most inspiring success stories of recent times. The quality (and consistency of quality) of the product is superb even by the best of international standards, and the airline has been able to create an enviable aspirational value from almost all strata of air travellers.

Yet, even after establishing a strong market leadership (if not on the basis of total volume of passengers flown but on all other parameters), the company failed to anticipate the strong challenge forced on it initially by Sahara through its very innovative marketing and promotion schemes such as the Super Sixer and On-Board 'auctions' and subsequently by Indian Airlines.

After steadily losing customers -- across all strata -- to its two main competitors for over 12 months, Jet finally responded very recently (weakly, I must add, as a very frequent traveller). While Jet still retains its aspirational value, it has ended up allowing its otherwise loyal customers to sample and then shift to its competitors, and in the process, perhaps, losing a big chunk of respect from its customers at large.

Examples abound in other sectors as well -- BPL and Videocon losing their permanent market position to LG and now Samsung, Bisleri losing its lead to Kinley and Aquafina, and if I may hesitantly add -- Shoppers Stop, RPG Retail, and Westside allowing Pantaloon to become the perceived leader in the Indian organised retail business in a relatively short time. Reliance Infocomm, despite a somewhat stuttered start, is well on its way to usurp leadership position from Bharti and Tata (Idea).

Where have these erstwhile leaders erred? I believe that almost in all the cases, the leaders made the mistake of becoming complacent and forgetting that the challenge faced by all leaders is the challenge of leadership itself.

From time immemorial, the human race has expected its leaders to be icons of strength, initiative, aggression, decisiveness and other such attributes.

In the world of business, leadership is epitomised by foresight, innovation, initiative, determination, and all round excellence. Today, the Indian consumer (like any other consumer in the world) is seeking far greater value than she was some years ago.

Value itself is a combination of many dimensions such as price, quality, reliability, ease of access or availability, design/style/ packaging, consistency of performance etc.

At the same time, as I have written several times in the recent past, the Indian consumer is facing an unprecedented 'category collide' wherein her 'need' basket of goods and services is increasing at a faster pace than her household income, and hence she has to make a dynamic choice each time to buy products perceived to be offering higher value.

The ultimate challenge, therefore, is being thrown to various suppliers actually by the end consumer. It is up to the leadership of the current or wanting-to-be leaders to rise to the occasion by leading from the front and coming out with products and services that continuously raise the bar of performance, thereby delighting their consumers, while keeping their competitors on their toes. Those who fail to do so risk not only losing marketshare but also the halo built around them!

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Arvind Singhal
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